Despite the Euro Zone’s usual geopolitical risk (I say “usual” because the place has been a hotbed of political risk for the past several years), I’ve been talking up its prospects — both in terms of its economy and its equity markets — to clients for months.
Here’s Bespoke Investment Group on the EZ’s most recent economic data:
Economic data today in Europe has been broadly
good as prelim April Spanish CPI beat estimates, Germany consumer confidence beat,
CBI reported retail volumes surged (though the more
predictive 3m average remains subdued, chart), and
Eurozone survey data surged. Consumer confidence
matched the cycle high of -3.6, industrial
confidence made a new local high and signals
industrial production growth of over 6% YoY,
and economic confidence suggests GDP growth of
2.5% YoY which would be near 2011 highs. The big disappointment was Spanish unemployment,
where the rate missed estimates.
And here’s a look at how well Euro Zone equities (using our preferred Euro Zone ETF) have performed relative to the U.S. so far this year: click to enlarge…